Chinese Internet portal Sohu.com's (SOHU) unaudited financial results for the fourth quarter and fiscal year ended December 31, 2007 show the company recorded brand advertising revenues of US$32.2 million, up 46% year-on-year and 8% quarter-on-quarter.
Dr. Charles Zhang, chairman and CEO of Sohu.com, stated in a press release, "Once again our team delivered an outstanding quarter with record total revenues and earnings. We are even more pleased to report that we exceeded our raised guidance in each of our revenue categories and earnings for the fourth quarter announced in early December. Sohu's technological innovation and leadership as well as our strategic vision and execution continue to be the catalysts that propel us forward. With the Beijing 2008 Olympic Games kicking off in 185 days, the Sohu brand resonates across China as we broaden our media reach to penetrate the Olympic audience. We expect the continued expansion of the total Chinese internet population, combined with our advancements in technology and our Olympic sponsorship, to help us to increase our market share of internet users. We believe that we will continue to reap the rewards of our success and strong branding for 2008 and beyond."
Total revenues for the fourth quarter ended December 31, 2007 were US$65.3 million, compared to revenues of US$51.5 million for the third quarter ended September 30, 2007, and US$34.4 million for the fourth quarter ended December 31, 2006. Gross margin of 71% for the fourth quarter of 2007 increased from 67% in the previous quarter and 63% in the same period of 2006. Non-GAAP gross margin was 72% in the fourth quarter of 2007, up from 67% in the previous quarter and 64% in the same period of 2006. The gross margin expansion was primarily due to the contribution from TLBB.
Net income for the fourth quarter of 2007 was US$15.1 million or US$0.39 per fully diluted share.
Advertising revenues for the fourth quarter of 2007 totaled US$33.7 million, a 7% quarter-on-quarter increase and a 35% year-on-year increase. Advertising revenues, consisting of US$32.2 million in brand advertising and US$1.5 million in sponsored search, accounted for 52% of total revenues in the fourth quarter of 2007.
For the fourth quarter of 2007, Sohu's non-advertising revenues, which are derived mainly from online game and wireless value-added services, were US$31.6 million, representing 48% of total revenues.